Washington It’s now a job killer for the history books. And this recession is a long way from over.
The nation lost nearly 600,000 jobs last month, the worst showing in a third of a century, as a vicious cycle of cutbacks by consumers forced ever more layoffs by beleaguered employers. The unemployment rate catapulted to 7.6 percent, the highest in 16 years, and seemed headed for double digits.
Some 3.6 million positions have disappeared so far in the deepening downturn, which now ranks as the biggest job destroyer in the post-World War II period and has raised pressure on President Barack Obama and Congress to agree quickly on a huge economic stimulus plan to stop the hemorrhaging.
On Wall Street, investors optimistically assumed action was on the way and pushed stock prices higher. The Dow Jones industrials gained more than 217 points, and all broad stock indexes surged nearly 3 percent.
Battered by the recession, employers slashed a net 598,000 jobs in January, the most since 1974, the Labor Department reported Friday. The jobless rate surged from 7.2 percent in December to 7.6 percent, and economists and government officials all agreed the toll was certain to go higher.
“These numbers demand action,” Obama declared, urging Congress to waste no time in completing work on the economic recovery package.
“If we drag our feet and fail to act, this crisis will turn into a catastrophe. We’ll continue to get devastating job reports like today’s month after month, year after year.”
The jobs lost so far since the recession began in December 2007 are the most of any downturn in the post-war period. About half the losses occurred just in the past three months.
Layoffs this month are likely to be just as bad. And job seekers’ prospects aren’t likely to become noticeably better until 2011 — at the earliest — when job growth should return to a more healthy pace, analysts said.
Louis DiFilippo, 30, who was laid off in October from a food store in Washington, recalls seeing sales slowing. “I saw that something had to give,” he remembers, “but I was hoping that it wouldn’t be my position.”
Unable to find a new job, he’s going back to school.
Even if the recession were to end by fall — a best-case scenario — the economy and the job market would remain feeble for some time. Economists predict anywhere from 2 million to 3 million or more jobs will disappear this year and the unemployment rate probably will climb to 10 percent or higher by the spring of 2010.
“We’re talking years — not months — before we see a decent recovery in the jobs market,” predicted Sung Won Sohn, economist at the Martin Smith School of Business at California State University. “It is going to get worse before it gets better.”
The pink slips are hitting all categories of workers — blue collar, white collar, those without high school diplomas and those with college degrees. And they’re sparing few occupations or corners of the country.